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M/S MAHAVIR PAINTS & ADHESIVES PVT. LTD. versus COMMISSIONER TRADE TAX, U.P.LUCKNOW

High Court of Judicature at Allahabad

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M/S Mahavir Paints & Adhesives Pvt. Ltd. v. Commissioner Trade Tax, U.P.Lucknow - SALES/TRADE TAX REVISION No. 101 of 1999 [2005] RD-AH 6336 (24 November 2005)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Court no.55

TRADE TAX REVISION NO.101 of 1999.

M/S Mahavir Paints & Adhesives Pvt., Ltd, Kanpur.  Applicant

Versus

The Commissioner, Trade Tax, U.P., Lucknow.  Opp.Party.

Hon'ble Rajes Kumar, J.

Present revision under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 30th December, 1998.

The applicant is a Company incorporated under the Companies Act, 1956 having its registered office at 106/369, Zeenat Market, Hiraganj, Kanpur and claimed to have established a new unit at S-13, Panki Industrial Estate, Kanpur for the manufacturing of paints and adhesives with the fixed capital investment of Rs.16,06,064,50 paise. The production was started on 3rd October, 1992 and first sale was made on 27th October, 1992. The applicant applied for exemption under section 4-A of the Act on the sale of manufactured goods for the period of five years from the date of the first sale i.e. for the period 27th October, 1992 to 25th October, 1997. When the application for exemption came up for consideration before the Divisional Level Committee, it was found that the applicant has purchased one mixer machine worth Rs. 1,500/- from M/S Mahavir Enterprises vide invoice no. 1932 dated 3rd March, 1994. That mixture machine was found old and, therefore, the Divisional Level Committee though recognized the unit of the applicant as new unit initially established but allowed the exemption only for the period 27th October, 1992 to 2nd March, 1994 and disallowed the claim of exemption for the subsequent period on the ground that the old mixer machine have been used in the unit. The claim of the applicant was that the mixer machine was used in the laboratory for the purposes of mixing and was not essentially required in the manufacturing of paints and adhesives. The certificate of S.K. Ahuja and Associates, consultant was filed explaining the process of manufacturing. In the certificate, it was also certified that small kitchen mixer is used in the laboratory for mixing purposes and the mixer was no way was the part of the production. Divisional Level Committee however has not accepted the plea of the applicant. Being aggrieved by the order of the Divisional Level Committee, the applicant filed appeal before the Tribunal. The Full Bench of the Tribunal sitting at Lucknow, by the impugned order, rejected the appeal. Tribunal held that the mixer machine was used in the laboratory for mixing purposes, but held that the laboratory is the part of the manufacturing unit and old mixer machine has been used by the applicant in its unit.

Heard learned counsel for the parties.

Learned counsel for the applicant submitted that the manufacturing process was carried on without the mixer machine. He submitted that the mixer machine was not required in the manufacturing of the product, which is clear from the fact that for two years, the manufacturing process was carried on without mixer machine.  He submitted that the mixer machine was purchased for use in the laboratory for mixing the items for research work only and not in the manufacturing of product. He submitted that in the report of S.K. Ahuja which has been given on the basis of visit of the factory, it has been stated that the kitchen mixer was used in the laboratory for mixing purposes and in no way, it was a part of the production. He submitted that no case has been made out either by the Divisional Level Committee or by the Tribunal that the mixer was an essential item required in the manufacturing of the final product. He also submitted the value of the mixer has not been added in the capital investment. In this view of the matter, he claimed that the exemption should be allowed for the entire period. He further submitted that for the purposes of granting exemption, liberal view should be taken. In support of his contention, he relied upon the decisions in the case of M/S Mansarovar Bottling Company Ltd., Bijnor Versus Commissioner of Trade Tax reported in 1999 UPTC 864, Commissioner of Sales Tax Versus Industrial Coal Enterprises reported in 1999 UPTC 250, H.M. Industries Versus Sales Tax Officer reported in 2003 UPTC 496, M/S Punjab Furnitures, Moradabad Versus Commissioner of Sales Tax reported in 2004 UPTC 1106 and M/S Kanta Granites Pvt. Ltd Versus Commissioner of Trade Tax reported in 2005 UPTC 515. Learned Standing Counsel relied upon the order of the Tribunal.

I have perused the order of the Tribunal and the authorities below.

The provisions of Section 4-A (6) Explanation 1 and Explanation 2 are extracted below:

"Explanation - For the purpose of this Section-

(1) "New Unit" during the period ending with 31st March, 1990, means an industrial undertaking set-up by a dealer on or after October 1, 1982 but not later than March 31, 1990--

(a) ....

(b) (i) ....

(ii) ....

(iii) ....

(c) ....

(d) Using machinery, accessories or components not already used, or acquired for use, in any factory or workshop in India.

(e) ....

And includes on industrial undertaking fulfilling the conditions laid down in Clauses (a) to (e) set up by a dealer.

(i) ....

(ii) ....

(i) ....

(ii) ....

(i) ....

(ii) ....

(iii) ....

(iv) ....

(2) "New Unit" after 31st March, 1990 means a factory or workshop set up by a dealer after such date and satisfying the conditions laid down under this Act or Rules or Notification made thereunder with regard to such factory or workshop and includes an industrial unit manufacturing the same goods at any other place in the State or an industrial unit manufacturing any other goods on or adjacent to the site of an existing factory or workshop, but does not include--

(a) any factory or workshop using machinery, plant, equipment, apparatus, or components already used or acquired for use in other factory or workshop in India other than boilers, generators, moulds and dyes and other than any machinery, plant, equipment, apparatus or components sold to it by any Government Company or any Corporation owned or controlled by the Central Government or State Government: or

(b) ....

(c) ...."

Relevant notification no.TT-2-780/XI-9(226)/94-UP Act-15/48-Order-95 dated 31.03.1995 reads as follows:

"WHEREAS, the State Government is of the opinion that for promoting the development of certain industries in the State, it is necessary to grant exemption from or reduction in rate of tax to new units and also to units which have undertaken expansion, diversification, modernization or backward integration.

NOW, THEREFORE, in exercise of the powers under section 4-A of the Uttar Pradesh Trade Tax Act, (UP Act NO.XV of 1948), hereinafter referred to as the Act, the Governor is pleased to declare that :-

1 (A) In respect of any goods manufacture in a ''new unit', other than the units of the type mentioned in Annexure II, established in the areas  mentioned in column 2 of Annexure I, the ''date of starting production' whereof falls on or after first day of April, 1995 but not later than 31sdt day of march, 2000, no tax shall be payable, or , as the case may be, the tax shall be payable at the reduced rates, as specified in column 4 of Annexure I, by the manufacturer thereof on the turnover of sales of such goods, for the period specified in column 3 o the said Annexure I, or till the maximum amount of tax relief by such exemption from or reduction in the rate of tax as specified in column 5 of Annexure I is achieved, whichever is earlier. The period specified in column 3 of the said Annexure shall be reckoned from the date of the first sale, or the date following the expiration of six months from the date of starting production, whichever is earlier.

1 (B) In respect of any goods manufactured in a unit, other than the units of the type mentioned in Annexure II, which has undertaken ''expansion, diversification or modernization' on or after April 1, 1995 but not later than march 31, 2000 in the areas mentioned in column 2 of Annexure I, no tax shall be payable or, as the case may be, the tax shall be payable at the reduced rates specified in column 4 of Annexure I, by the manufacturer thereof for the period specified in column 3 of the Annexure I, or till the maximum amount of tax relief by such exemption from or reduction in rate of tax as specified in column 5 of Annexure I is achieved, whichever is earlier, on the turnover of sales:

(a) of the quantity of goods manufactured in excess of the base production in the case of units undertaking expansion or modernization: and

(b) of goods manufactured by the unit which are of a nature different from those manufactured earlier by such unit in the case of units undertaking diversification.

1 (C) .....

2. ....

3. ....

4. ....

5. ''Fixed Capital Investment' or, as the case may be, additional fixed capital investment may, unless otherwise established, be determined in the case of an industrial undertaking financed by a term loan advanced by a public financial institution or a Scheduled Bank according to the certificate to that effect issued by such institution or the Bank and in any other case, according to---

(a) the value of the land certified by the Collector in accordance with the procedure laid down for determination of the value of land for the purpose of payment of stamp duty under the Indian Stamp Act, 1899.

(b) the value of building certified by an evaluator approved by the Income Tax Department for the purpose.

(c) the value of plant, machinery, equipment, apparatus, components, moulds, dyes, jigs and fixtures certified by a Chartered Accountant.

6. In determining the ''fixed capital investment' in case of ''new units' or ''additional capital investment' referred to in clause (d) of Explanation (5) or clause (ii) of Explanation (7) of section 4-A in case of units which have undertaken expansion, diversification or modernization or backward integration, the investment in only, such land, building, plant, machinery, equipment, apparatus, components, moulds, dyes, jigs and fixtures shall be taken into account as were acquired on or before the relevant date of commencement of the period of facility notified under sub-section (1) of section 4-A of the Act.

7. (a) turnover of sale of goods in any assessment year to the extent of the quantity covered by base production of that year and the stock of base production of previous years shall be deemed to be the turnover of base production.

(b) only the turnover of goods in any assessment year in excess of the quantity referred to in clause (a) shall be entitled to the facility of exemption from or reduction in the rate of tax.

ANNEXURE-I

Sl.No. Location of unit Total period of exemption/reduction in the rate of tax. Exemption from or reduction in rate of tax (denoted as percentage of the rate of tax normally applicable under the UP Act to the goods concerned) which, on any transaction of sale, shall not exceed five percent of the sale price.Year   In case of in case units with a of other fixed capital units investment exceeding 50 crores Monetary limit upto which the benefit of exemption from or reduction in the rate of tax under the act together with the benefit of exemption from or reduction in the rate of tax under the Central Sales Tax Act, 1956 is admissible.

1 2 3 4 5

1. The districts of  Almora, Banda, Chamoli, Dehradun, Hamirpur, Jalaun, Jaunpur, Kanpur (Dehat) Mahoba, Nainital, pauri-Garhwal, Sultanpur, Uttarkashi, Pithoragarh and Tehri-Garhwal. Twelve years 1st year   100%   100%2nd year   100%   100%3rd year    100%   100%4th year    100%    100%5th year     100%   75%6th year    100%    75%7th year     100%   75%8th year      100%   50%9th year      100%   50%10th year    100%   25%11th year     100%   25%12th year     100%   25% 250% of the fixed capital investment or, as the case may be the additional fixed capital investment.

2 (i) The districts of Azamgarh, Baharaich, Ballia, Barabank, Basti, Budaun, Bulandshahr, Deoria, Etah, Etawah, Faizabad, Farrukhabad, Ghazipur, Gonds, Hardoi, Jhansi, Lalitpur, Mainpuri, Mathura, Mau, Moradabad, Padrauna, Pilibhit, Pratapgrah, Raebareli, Rampur, Shahjahanpur, Sidharthnagar, Sitapur and Unnao.(ii)  The area of Allahabad.Districts in south of the river Jamuna and confluent Ganga (excluding the area included under Municipal Corporation. Allahabad).(iii)  The Taj Trapezium area.(iv)  Greater NOIDA Industrial Development area. Ten Years 1st year   100%   100%2nd year   100%   100%3rd year    100%   100%4th year    100%    75%5th year     100%   75%6th year    100%    75%7th year     100%   50%8th year      100%   50%9th year      100%   25%10th year    100%   25% 200% of the fixed capital investment or, as the case may be the additional fixed capital investment.

3. The districts of Agra (excluding Taj Trapezium Area), Aligarh (excluding Taj Trapezium Area), Allahabad (excluding the area in south of rivers Jamuna and confluent Ganga but including the area included under Municipal Corporation, Allahabad), Bareilly,Bhadohi, Bijnor, Firozabad (excluding Taj Trapesium Area). Ghaziabad (excluding the Greater NOIDA Industrial Development Area), Gorakhpur, Haridwar, Kanpur (Nagar0, Lakhimpur-kheri, Lucknow, Mahrajganj, Meerut, Mirapur, Muzaffarnagar, Saharanpur, Sonbhadra and Varanasi. Eight years 1st year   100%   100%2nd year   100%   100%3rd year    100%   75%4th year    100%    75%5th year     100%   50%6th year    100%    50%7th year     100%   25%8th year      100%   25% 175% of the fixed capital investment or, as the case may be, additional fixed capital investment in case of small scale units and 250% of the fixed capital investment or additional fixed capital investment in case of the other units.

EXPLANATION :

1. "Taj Traplezium Area" means the area within the Trapezium formed by joining the following points with each other:

(1) inter-section of 27  45' North latitude and 77 15' East longitude.

(2) inter-section of 27  45' North latitude and 77 15' East longitude.

(3) inter-section of 27 00' North latitude and 78  30' East longitude.

(4) inter-section of 27 30' North latitude and 78  30' East longitude.

2. "Small scale unit", means an industrial undertaking certified by the Director of Industries. Uttar Pradesh in accordance with the guidelines, issued in this behalf by the Government of India to be:-

(a) a small scale industrial undertaking the fixed capital investment whereof does not exceed sixty lakh rupees:

(b) an ancillary industrial undertaking the fixed capital investment whereof does not exceed seventy-five lakh rupees.

3. "Greater NOIDA Industrial Development Area" means the area declared as such by Government Notification No.7436 Bhau/XVIII-11-107-Bha-85, dt. January 28, 1991.

4. For the purposes  of this notification the expression "Other Backward Classes of Citizens" shall have the meaning assigned to it in the Uttar Pradesh Public Services (Reservation for Scheduled Castes, Scheduled Tribes and Other Backward Classes) Act, 1994 and the expression "Minorities" shall have the meaning assigned to it under Article 30 of the Constitution".

Perusal of Explanation 1 and 2 shows that there is difference in the definition of the new unit established prior to 31.03.1990 and the unit established after 31.03.1990. From the perusal of the definition of the new unit for the purpose of the present case. Explanation I says that new unit during the period ending with 31.03.1990 means an industrial undertaking set-up by a dealer on or after 31.03.1990 using machinery, accessories or components not already used, acquired for use in any other factory or workshop in India. Explanation-II defines new unit after 31.03.1990 means a factory or workshop set up but does not include any factory or workshop using machinery, plant, equipment, apparatus or components already used or acquired for use in any other factory or workshop in India other than boilers, generators, moulds and dyes and other than any machinery, plant, equipment, apparatus or component sold to it by any Government Company or any corporation owned or controlled by the Central or State Government. In the definition of the new unit prior to 31.03.1990 all the machines, accessories or component should be new. In the definition of new unit after 31.03.1990 "accessories" has been excluded and was not required to be new and those unit using old boilers, generators, moulds and dyes have also been included in the new unit.  As per the notification the benefit of exemption to the new unit established prior to 31.03.1990 was on the total turn over of the manufactured product in a specified period. However, to the unit established after 31.03.1990, the exemption was limited to the multiple to the value of fixed capital assets as the case may be. It is not unlimited.

The definition of the new unit established after 31.03.1990 came up for consideration before this Court in the case of M/s Progressive Components Private Limited Vs. CST, reported in 2000 UPTC,131. This Court was of the view that the Explanation to Section 4-A covers those machines, which are essential for carrying out the manufacturing process. In that case one snuffing machine was found old since no finding was recorded that whether snuffing machine was essential for running out the manufacturing process. Matter was remanded back, therefore, it appears that learned Single Judge was of the view that under the Explanation only those machines, which are essential to carry out the manufacturing activity is to be considered and not all machines.

In the case of  M/s Jawahar Metal Industries (P) Ltd., Shahibabad Vs. State of U.P. and others, reported in 1995 UPTC, 812, out of the total investment towards machine for Rs.19,24,891/-, the value of one old machine was of Rs.11,325/- which was drill machine and bearings. The Division Bench of this Court held that in the circumstances unit can not be denied exemption.

In the case of M/s J.K.Steels, Ghaziabad Vs. State of U.P. and others, reported in 1994 UPTC, 936 as against the total value of machines at Rs.19,24,891/- value of old machine was Rs.1,453/-. Division Bench of this Court held that the exemption can not be denied.

In the case of M/s Neel Kamal Oil Mills, Dadra, Ghaziabad Vs. State of U.P. and others, reported in 1994 UPTC, 606, exemption under section 4-A was refused on the ground that the unit was using old generator taken on hire. Petitioner was engaged in the business of manufacturing of oil and oil cakes. Division Bench of this Court held that generator, which was hired by the petitioner can not be said to be an integral part of the machinery purchased by the petitioner for the manufacture of oil and oil cakes nor can that be said to be the accessories or components of the machinery. It was held that generator, which is only a source of power, can not be said to be the part of machinery used in the manufacture of oil and oil cakes.

In the case of Bajaj Tempo Ltd., Bombay Vs. Commissioner of Income Tax, reported in 1992 UPTC, 857, as against the total investment of Rs.1,04,104/- towards machine, one machine worth Rs.1,453/- was old. Apex Court held that the exemption can not be denied.

"The section, read as a whole, was a provision, directed towards encouraging industrialization by permitting an assessee setting up a new undertaking to claim benefit of not paying tax to the extent of six per cent in a year o the capital employed. But the legislature took care to restrict such benefit only to those undertakings which were new in form and substance, by providing that the undertaking should not be, ''formed' in any manner provided in Clause (i) of sub-section (2) of Section 15-C. Each of these requirements, namely, formation of the undertaking by splitting up or reconstruction of an existing business or transfer to the undertaking of building, raw material or plant in any previous business results in denial of the benefit contemplated under sub-section (1). Since a provision intended for promoting economic growth has to be interpreted liberally the restriction on it, too, has to be construed so as to advance the objective of the section and not to frustrate it. But that turned out to be the, unintended, consequence of construing the clause literally, as was done by the High Court for which it cannot be blamed, as the provision is susceptible of such construction if the purpose behind its enactment, the objective it sought to achieve and the mischief it intended to control is lost sight of. One way of reading it is that the clause excludes any undertaking formed by transfer to it of any building, plant or machinery used previously in any other business. No objection could have been taken to such reading but when the result of reading in such plain and simple manner is analysed then it appears that literal construction would not be proper. Taking facts of this case as illustration the inherent fallacy surfaces. The Income Tax Officer found that tools and implements worth Rs.3,500/- used in earlier business were transferred to it. They compised of machines which were of very minor nature. But for one spotwelding machine the cost of which was Rs.1,500/- the other 13 items were of value of rs.100/-, Rs.200/-, Rs.300/- or at most Rs.400/-. On plain reading the effect of such transfer was operation of the clause and denial of benefit to the assessee. But that would be denial of very purpose for which the provision was enacted. The Legislature by clause (i) of sub-section (2) of section 15-C intended to control any attempt or effort to abuse the benefit intended for new undertaking by change of label. The intention was not to deny benefit to genuine new industrial undertaking but to control the mischief which might have otherwise taken place. The result was however just the contrary. Any use of building or plant or machinery howsoever nominal either because of compulsion or inadvertence or sheer necessity fell in the mischief and the departmental authorities, bound as they were with the provision of the section, refused to grant exemption. High Courts also differed in their approach. Various decisions which were placed before us leave no room. Some related to transfer of machinery to the new business and others to the building. In respect of machinery the High Courts appear to be nearly unanimous that where the value of transferred machinery was low or meager the assessee should not be denied the benefit. For instance the Calcutta High Court in Commissioner of Income Tax, West Bengal-II Vs. Sainthia Rice and Oil Mills, 82 ITR (1971) 778 (Cal) did not find any reason to deny the benefit to the assessee where the undertaking was formed by acquisition of part of machinery in second hand from open market. But the decision which became the leading decision on transfer of machinery was rendered by Delhi High Court in Commissioner of Income Tax Vs. Ganga Sugar Corporation Ltd., 92 ITR (1973) 173 (Delhi). It has been followed in nearly all the decisions, given subsequently as it was approved by this Court. It was held that use of scrap and material of the old unit of the value of a small fraction of the expenditure involved in the setting up of the new unit did not attract the concluding words of clause (i) of Section 15 (2).  The Calcutta High Court in Commissioner of Income Tax, West Bengal-I Vs. Electric Construction and Equipment Company Ltd. (Cal.), 104 ITR (1976), was of view that where machinery previously used was ''very small compared to the value of the machinery installed' the assessee was well within sub-section (1) of Section 15-C. Same view was taken by the Bombay High Court in Commissioner of Income Tax, Bombay City-I v. Asbestos, Magnesia & Friction Materials Ltd., 106 ITR (1977) 286 and it was observed, that the important aspect to be ''considered must be the monetary value of the old assets transferred to and utilized in the new undertaking'.  In Commissioner of Income Tax, Bombay City-I v. Kopran Chemical Co. Ltd., 112 ITR (1978) 893 the Court answered the question in favour of assessee as the machinery transferred to the new business was of ''insignificant value'. In another decision the Bombay High Court in Commissioner of Income Tax, Bombay City-II v. Sawyer's Asia Ltd., 122 ITR (1980) 259 while construing analogous provision. Section 84 (2) of 1961 Act opined that where machinery taken on hire formed ''insignificant part of the total value' the assessee could not be denied the benefit. In the case of L.G. Balakrishnan & Bros. Ltd v. Commissioner of Income Tax, Madras, 151 ITR (1985) 270 the Madras High Court decided against the assessee not on proportion or value of the machinery transferred but because lease of machinery amounted to transfer".

In the case of CST Vs. Industrial Coal, reported in 1999 UPTC, 250. Apex Court has examined Section 4-A of the Act and held as follows:

"In Commissioner of Income tax, Amritsar V. Strawboard Manufacturing Co.Ltd.{1989} 177 ITR 431;(1989) Supp.2 SCC 523 this Court held that in taxing statutes, provision for concessional rate of tax should be liberally construed. So also in Bajaj Tempo Ltd.V. Commissioner of Income-tax(1992) 196 ITR 188(SC);(1992)3 SCC 78, it was held that provision granting incentive for promoting economic growth and development in taxing statutes should be liberally construed and restriction placed on it by way of exception should be construed in a reasonable and purposive manner so as to advance the objective of the provision.

We find that the object of granting exemption from payment of sales tax has always been for encouraging capital investment and establishment of industrial units for the purpose of increasing production of goods and promoting the development of industry in the State. It the test laid down in Bajaj Tempo Ltd., case (supra) is applied, there is no doubt whatever that the exemption granted to the respondent from 9th August, 1985 when it fulfilled all the prescribed conditions will not cease to operate just because the capital investment exceeded the limit of Rs.3 lakhs on account of the respondent becoming the owner of land and building to which the unit was shifted. If the construction sought to be placed by the appellant is accepted, the very purpose and object of the grant of exemption will be defeated. After all, the respondent had only shifted the unit to its own premises which made it much more convenient and easier for the respondent to carry on the production of the goods undisturbed by the vagaries of the lessor and without any necessity to spend a part of its income on rent. It is not the case of the appellant that there was any mala fides on the part of the respondent in obtaining exemption in the first instance as a unit with a capital investment below Rs.3 lakhs and increasing the capital investment subsequently to an amount exceeding Rs.3 lakhs with a view to defeat the provisions of any of the relevant statutes. The bona fides of the respondent have never been questioned by the appellant."

In the case of H.M. Industries and another Vs. STO and another, reported in 2003 NTN (Vol.22), 354, the exemption application under section 4-A was rejected on the ground that the petitioner used old crucible. The Division Bench of this Court held that exemption can not be denied for this ground only. In this case decision of the Apex Court in the case of Bajaj Tempo Ltd., Bombay Vs. Commissioner of Income Tax, Bombay, (Supra), Division Bench of this Court in the case of M/s Jawahar Metal Industries (P) Ltd., Shahibabad Vs. State of U.P. and others, and CST Vs. Industrial Coal, reported in 1999 (Supra) have been relied upon.

In the case of M/S Kanta Granites Pvt. Ltd Versus Commissioner of Trade Tax (supra) unit was involved in the cutting and polishing granite rocks into various shapes and sizes. In the establishment of the unit, the total capital investment was Rs. 40,58,322.20 paise, which comprises of the valueof the machinery for Rs. 23,80,950.20 paise. One old zip crane-valuing Rs.62,400/- was used in the unit for transportation of boulders from one place to another and for putting the boulders on cuttings slicing machine. Exemption under section 4-A of the Act was disallowed on the ground that in the unit, the old zip crane machine was used. The claim of the applicant was that the said old zip crane was not required in the process of cutting and polishing granite rocks and was required only for the transportation of the boulders from one place to another place and was not the machinery essentially required in the manufacturing and therefore, could not be considered for the purposes of exemption. This Court relied upon the various decisions of this court and the Apex Court and held that the exemption could not be disallowed because zip crane was not essentially required for cutting and polishing granite, rocks.

In the present case, admittedly the said old mixer machine valuing Rs. 1,500/- was used in the laboratory for mixing purposes and was not used in the manufacturing unit for the manufacturing of paints and varnishes. Thus, mixer was not essentially required for the manufacturing. This fact is also established from the fact that the unit had carried on the manufacturing for the period of two years without mixer. In the circumstances, the period of exemption could not be curtailed

In the result, revision is allowed. Order of the Tribunal is set aside and the Divisional Level Committee is directed to modify the eligibility certificate granting exemption for the period of five years i.e. from 27th October, 1992 to 25th October, 1997.

Dated.24.11.2005.

VS.


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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